Summary
In Atkinson, the plaintiff was a subcontractor to the Orr-Ault Construction Company, which had given bond to an insurance company as surety for unpaid debts on the contract.
Summary of this case from G.R. Osterland Co. v. T. a Bridge Cons.Opinion
No. 22443
Decided March 18, 1931 Reheard and decided June 17, 1931.
Public contracts — Surety bond — Statement by sub-contractor to surety ninety days before improvement accepted — Section 2365-3, General Code — Furnishing statement before instituting suit against surety, jurisdictional.
ERROR to the Court of Appeals of Monroe county.
This is a proceeding to reverse the Court of Appeals of Monroe county. The facts incident to the controversy are:
The Orr-Ault Construction Company entered into a contract for the improvement of the Woodsfield-Calais road in Monroe county, the contract being dated the 4th of October, 1926. The construction company gave bond, signed by the Maryland Casualty Company as surety, to indemnify the county commissioners against loss or damage arising by failure of the construction company to fully perform the contract, by virtue of Section 2365-4, General Code. Said bond also was conditioned to indemnify the subcontractors, materialmen and laborers for labor performed and materials furnished in carrying forward, performing, or completing said contract.
It seems the plaintiff in error John Atkinson was employed by the construction company, in the performance of its contract, to haul and spread stone on said road, and did perform such services, for which the construction company gave plaintiff in error a note which remains unpaid, although the same has been reduced to a judgment.
The Orr-Ault Construction Company failed to complete the contract, became financially involved, and made an assignment for the benefit of creditors on November 14, 1928, and was no longer in position to perform the contract. The assignee appointed by the probate court took charge of the tools and equipment of the construction company.
This action was begun November 21, 1928, seeking to recover upon the bond of the surety company, the Maryland Casualty Company of Baltimore, Maryland.
The question presented for determination here is raised by demurrer, which the court of common pleas and the Court of Appeals held should be sustained, holding that the plaintiff's petition was defective by reason of the fact that it did not allege that any statement of account due and unpaid from the contractor to the subcontractor was presented to the surety company in the manner and in the time provided for such statement to be furnished to sureties, as provided in Section 2365-3, General Code, which section is as follows: "Any person, firm or corporation to whom any money shall be due on account of having performed any labor, or furnished any material in the construction, erection, alteration or repair of any such building, work or improvement, at any time after performing such labor or furnishing such material, but not later than ninety days after the acceptance of such building, work or improvement by the duly authorized board or officer, shall furnish the sureties on said bond, a statement of the amount due to any such person, firm or corporation.
"No suit shall be brought against said sureties on said bond until after sixty days after the furnishing of said statement. If said indebtedness shall not be paid in full at the expiration of said sixty days, said person, firm or corporation may bring an action in his own name upon such bond, as provided in Sections 11242 and 11243 of the General Code, said action to be commenced not later than one year from the date of acceptance of said building, work or improvement."
It being conceded that no such statement as provided for in the foregoing section was furnished by the subcontractor to the surety company, it is urged by counsel for plaintiff in error that such statement was not necessary, because the contract in question was never completed, and it was impossible to comply with the provisions of Section 2365-3, General Code, because there had been no "acceptance of such building, work or improvement by the duly authorized board or officer."
The court of common pleas sustained a demurrer to the amended petition for failure to show the furnishing of the statement provided for in Section 2365-3, General Code, which judgment was affirmed by the Court of Appeals. Error is now prosecuted in this court to reverse such judgment.
Messrs. Lynch Sawyers and Mr. T.J. Kremer, for plaintiffs in error.
Messrs. Thornburg Lewis, for defendant in error the Maryland Casualty Company.
This matter was submitted at an earlier date of this term, and a rehearing having been granted, and reargument had, the court has reached the conclusion that Section 2365-3, General Code, requiring one performing labor or furnishing material in the construction, erection, alteration or repair of a building, work or improvement, under contracts referred to in such section, to furnish the sureties on the bond of the principal contractor a statement of the amount due such person, firm or corporation before suit may be brought upon such bond, is jurisdictional in character. In this case, it being conceded that no such statement was furnished, the demurrers to the petition for failure to so show were rightly sustained by the courts below.
The judgment of the Court of Appeals in affirming the judgment of the court of common pleas is therefore affirmed.
Judgment affirmed.
MARSHALL, C.J., JONES, MATTHIAS, DAY, ALLEN, KINKADE and ROBINSON, JJ., concur.